Accord Annual Report 2014 - The Bangladesh Accord on Fire and

Accord Annual Report 2014 - The Bangladesh Accord on Fire and

ANNUAL REPORT
TABLE OF CONTENTS
3
BACKGROUND TO THE ACCORD – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
4
Purpose and Key Components – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
4
Accord Funding – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
4
Organisational Development – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
4
IMPLEMENTATION PROGRESS (November 2015) – – – – – – – – – – – – – – – – – – – – – – – – –
7
Forward from Executive Director and Chief Safety Inspector – – – – – – – – – – – – – – – – – – –
7
DIRECTOR’S REPORT – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
13
Director’s Statement – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
13
FINANCIAL REPORT 2014 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
15
1. Balance sheet 31-12-2014 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
16
2. Statement of income and expenditure 2014 – – – – – – – – – – – – – – – – – – – – – – – – –
17
3. Accounting policies – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
18
4. Specification of the balance sheet: current assets – – – – – – – – – – – – – – – – – – – – – –
19
Explanation of the balance sheet: current liabilities – – – – – – – – – – – – – – – – – – – – – –
20
5. Statement of income and expenditure - explanation income – – – – – – – – – – – – – – – –
22
Statement of income and expenditure - explanation expenditure (continued) – – – – – – –
22
6. Tangible fixed Assets – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
24
7. Other Information – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
25
7.1. Statutory result appropriation – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
25
7.2. Appropriation of result – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
25
7.3. Auditors Report – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
25
BOARD OF DIRECTORS – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
29
EXECUTIVE LEADERSHIP TEAM – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
29
LIST OF SIGNATORIES – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
30
Union Signatories – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
33
Witness Signatories – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
33
BACKGROUND TO THE ACCORD
The Accord on Fire and Building Safety in Bangladesh (the Accord) was signed on May 15th
2013. It is an unprecedented five year independent, legally binding agreement between 217
garment brands and retailers and trade unions designed to build a safe and healthy
Bangladeshi Ready Made Garment (RMG) industry. The agreement was signed in the
immediate aftermath of the Rana Plaza building collapse that led to the death more than
1100 people and injured more than 2000.
Since its creation in May 2013, the signatories to the agreement set out to establish a fire and
building safety program in Bangladesh for a period of five years. The Accord is governed by a
Steering Committee consisting of equal representation of trade union and company
representatives.
The Stichting Bangladesh Accord Foundation was established in the Netherlands shortly
after the signing of the agreement. A Liaison office was established in Dhaka, Bangladesh in
February 2014.
The Bangladesh office leads the inspection and remediation programs, constituent
engagement, and the workplace occupational safety and health (OSH) elements of the
Accord. The workplace programs include an OSH complaints mechanism; protections for
workers at supplier factories to refuse dangerous work; and programs to support and train
joint worker-management OSH Committees in Accord covered factories. The international
team based in the Netherlands office are responsible for signatory account and data
management, signatory company outreach, international external stakeholder engagement
and external communications.
Purpose
The Accord is an independent, legally binding agreement between brands and trade unions
designed to work towards a safe and healthy Bangladeshi Ready-Made Garment Industry.
Our purpose is to establish a safe and sustainable Bangladeshi Ready-Made Garment (RMG)
industry in which no worker needs to fear fires, building collapses, or other accidents that
could be prevented with reasonable health and safety measures.
The six key components of the Accord
1.
2.
3.
4.
Legally binding agreement between clothing brands & retailers and trade unions.
Independent inspections program involving workers.
Disclosure of factories, inspection reports and corrective actions.
Commitment to ensure sufficient funds for remediation and to maintain sourcing
relationships.
5. Joint worker-management safety and health committees in all factories.
6. Worker training program, complaints mechanism, right to refuse unsafe work.
Accord Funding
Each signatory company contributes funding in proportion to the annual volume of its
garment production in Bangladesh, relative to that of the other signatory companies, up to a
maximum contribution of $500,000 per year averaged over the 5 years of the Accord. The
Steering Committee may also seek financial contributions from governmental and other
donors, and employs transparent procedures for the accounting and oversight of all
contributions.
Organisational Development
The Accord continues to grow impressively into an organisation of more than 150 staff
members in Bangladesh. The team in Bangladesh consists of engineers, remediation and
complaint case handlers (RCCHs), trainers, and support staff. The Executive Director and
Chief Safety Inspector are also based in the Dhaka office.
5
The Accord has three engineering teams (60 engineers total) specializing in the areas of
inspections and remediation: fire, electrical and structural safety. The team of 25 RCCHs are
responsible for coordinating inspections and remediation at assigned factories, updating the
publicly available Corrective Actions Plan (CAPs) based on factory reporting and follow-up
inspections by the engineers, and processing OSH complaints regarding their assigned
factories.
A training team has been formed to develop the Accord’s training programs and to support
the work with OSH Committees at the factory level. The Accord’s support staff now includes
a Communications Officer, a Labour-Union Liaison Officer, in-house Translators, an IT
specialist, and several administrative and finance staff.
The Accord is in the process of registering additional offices in Chittagong and areas just
outside Dhaka where the inspected factories are located. These offices will help limit travel
time for engineers and trainers visiting factories and will also provide easier access to Accord
support and services for factory owners, workers, and trade unions.
The international team of the Accord is based in Amsterdam, the Netherlands, and is
primarily responsible for brand outreach, data management, external communication and
stakeholder engagement outside Bangladesh.
The Accord’s website was relaunched in early 2015 in both English and Bangla. The
upgraded website includes: new pages about the Accord programs, signatories and
governance issues, a technical resource center, and a dedicated page showing the Accord’s
progress in making garment factories in Bangladesh safe. Factory-by-factory information on
progress in implementing the CAPs can be found on the inspections and CAPs page.
6
IMPLEMENTATION PROGRESS (NOVEMBER 2015)
Foreword from the Chief Safety Inspector and Executive Director
The Accord on Fire and Building Safety in Bangladesh (Accord) made substantial progress in
executing the commitments of the company and labour signatories in the second year of our
operations. In September 2014, the first batch of initial inspections to identify fire, electrical,
and structural safety hazards were completed at 1100 supplier factories. From January to
March 2015, a second batch of initial inspections were completed at an additional 180 newly
listed supplier factories. An additional approximately 250 factories which supply for both
Accord and Alliance for Bangladesh Worker Safety companies and retailers were inspected
by the Alliance. For each of these factories, the Accord has developed and published a
Corrective Action Plan which elaborates each safety finding, what needs to be done to correct
the finding, and the current status of progress in correcting each safety hazard.
The Accord focused our work in four primary areas during our second year: completing
initial safety inspections; supporting, verifying, and reporting on remediation of identified
safety hazards at inspected factories; designing and operationalizing the workplace OSH
programs of the Accord; and supporting the National Plan of Action for Fire Safety and
Structural Integrity (NPoA).
The Accord conducted a series of additional, special structural inspections at 133 of
vulnerable factories1 after the earthquakes which hit Bangladesh in April 2015. The Accord
conducted similar special inspections at 18 factories after being contacted by employees who
expressed concerns of potential structural damage at their factory resulting from the
earthquakes. All identified safety concerns through these inspections were remediated with
the technical support of Accord engineers.
1
The Accord conducted
these post-earthquake
inspections at factories
which, through our initial
structural safety
inspection, were
deemed more
vulnerable due to the
low factor of structural
safety as measured
against the Accord
structural safety
inspection standard.
While progress on safety remediation was made in the second year of the Accord, the pace of
executing and completing this has been unacceptably delayed at the majority of inspected
factories. During the course of the year, the Accord conducted several analyses to determine
and address the causes for the delays. The Accord also implemented support and escalation
measures to advance the level and pace of correcting identified safety hazards. These
measures included hiring additional engineers to provide technical support to supplier
factories, developing remediation technical resource materials, and where warranted,
implementing the non-compliance escalation procedures of the Accord. These escalation
measures culminate with signatory companies ending their business relationship with a
supplier who, after support efforts from the Accord, fails to adequately progress in
remediating safety hazards (under Article 21 of the Accord). There were 8 such cases
through December 2015.
The Accord has established a Training Department, which will implement the OSH
committee support and training elements of the Accord. Trainers spent much of the year
developing and refining the training methodologies, approaches, and materials for
supporting and training OSH committee members from labour and management. As we
approached the end of the second year, a pilot program to support and train OSH committees
at supplier factories with a registered union started2. In the remaining years of the Accord,
training and support will be provided to labour and management representatives of OSH
committees and a general worker safety education program will be delivered. This work will
continue both at Accord listed factories where there is a registered workers’ union and where
there is no union.
2
The Accord began the
OSH committee work at
unionized factories as
we awaited the
finalization of the
implementation rules of
the Bangladesh Labour
Act 2013.
Brad Loewen, Accord Chief Safety Inspector
Rob Wayss, Accord Executive Director
7
Independent Inspections
The Accord completed the first batch of initial inspections of 1100 factories in September
2014. A second batch of initial inspections was completed at an additional 180 newly listed
factories between January and April 2015. In October 2015, a third batch commenced at an
additional 100 newly listed factories. These inspections were completed in early December
2015. International engineering firms with demonstrated expertise in fire, electrical, and
structural engineering were competitively selected to perform these inspections. The
contracted firms utilized teams made up of international and Bangladeshi engineers who
inspected the factories to identify the most urgent safety concerns in the 3 areas that the
Accord inspection standard covers3.
3
The Accord building
standard was developed
through an inclusive
process with Accord,
Alliance, and
Government of
Bangladesh engineers.
The discussions leading
to the development of
the standard were
facilitated by the ILO.
The initial structural inspections at 32 factory buildings required convening the Review
Panel4 due to findings which placed the building below the minimum acceptable factory of
safety for production and occupancy to be allowed. In most of these cases, emergency
remedial measures and/or temporary re-location of production and workers were exercised
to avoid discontinuity of production and employment at affected suppliers. In four cases,
Accord provisions on maintenance of employment and payment of regular wages were not
been met. Accord labour and company signatories are in discussions to remedy these cases.
4
The Review Panel has
been established
through the National
Plan of Action to
convene when National
Effort, Accord, or Alliance
structural inspections
result in a
recommendation to
suspend production or
evacuate a factory
building. The 4
engineers on the Panel
[BUET (2), Accord (1), and
Alliance (1)] must
unanimously decide to
permit partial or full
production to resume. If
there is no unanimous
decision, the production
must remain suspended
until required
remediation / corrective
action is taken to ensure
safe re-occupation.
At an additional 110 facotries, urgent structural remediation was required to address building
vulnerabilities and to avoid submission of the findings to the Review Panel. Accordingly,
supporting and monitoring remediation at these factories was a priority for the Accord
structural engineering team during the year.
In addition to the initial inspections conducted by contracted firms, the Accord fire,
electrical, and structural engineering staff conducted 1304 follow up inspections at listed
supplier factories to support and verify remediation. The initial inspections were designed to
identify the most urgent, life safety issues so that most vulnerable situations could be
immediately addressed. As the follow up inspections and remediation verification work
commenced, the Accord engineers identify safety issues which the one-day initial inspections
did not always reveal. These safety findings are also an element of the Accord inspections
work and items that we work with the factories to remediate.
The engineering team also dedicated time to review and approve designs of automated fire
alarm systems, designs of sprinkler systems, detailed engineering analyses to determine
structural retrofitting requirements, and to provide technical consultation to factory
technical staff to ensure remediation is performed correctly.
Safety Hazard Remediation at Inspected Factories
In addition to the initial inspections, executing and verifying remediation at inspected
factories has been a major area of focus in the 2nd year of Accord operations. The team of
Accord staff engineers are assigned to spend at least 50% of their worktime in factories
performing follow up inspections, verifying safety hazards which have been corrected, and
assisting factories to complete remediation. The engineers are supported by a team of 25
remediation and complaint case handlers who perform the work of coordination, data
management, and public reporting of the remediation progress. A lot of progress was made
in the second year of the Accord. In addition to completing initial inspections at listed
factories, approximately 50% of the safety hazards identified from these inspections have
been reported or verified as corrected.
While a lot of progress has been achieved in making inspected factories safer, the pace of
remediating safety hazards is too far behind at too many factories. The Accord has
aggressively focused on remediation and has made this a highest priority issue for our work
and resource allocations. We have conducted analyses to determine the reasons or obstacles
to completing remediation in a timely manner. The information gathered through these
exercises has informed a remediation completion program which is now being implemented
by the Accord.
9
The Accord is committed to safety remediation being completed at every listed factory. The
Accord’s commitment of staff, financial and technical resources, implementation of support
and enforcement measures, and transparency in reporting progress demonstrate our
dedication to this fundamental objective of our work.
The Accord’s remediation work was hampered from January – March 2015 due to the
frequent blockades and strikes (hartals) which plagued the country and limited our ability to
safely send engineers to the field. Our structural remediation follow up work was
temporarily affected by the additional structural inspections associated with the April 2015
earthquakes which hit Bangladesh.
Approximately 350 of the inspected supplier factories produce garments for Accord and
Alliance signatory companies. The Accord coordinates with the Alliance’s technical and
coordination teams in our follow up inspections and remediation verification work with these
factories. The Accord has committed to informing the Alliance of our scheduled follow up at
common suppliers and providing information received or verified from such visits so that
current information on the status of remediation is available to both and to minimize
potential inconveniences to the supplier factories.
In addition to the technical support and follow up with supplier factories, the Accord works
extensively with our signatory company and labour colleagues to maximize their leverage to
advance remediation at the inspected factories.
Data, Transparency and Public Reporting
A key and distinguishing feature of the Accord is making substantive information on our
work and progress in executing the commitments of the agreement publicly available. In our
second year of operations, the Accord made unprecedented amounts of information available
to our signatories and to the public. The Accord made significant investments in customizing
our database to support signatory companies to manage remediation at supplier factories
and to enhance our public reporting.
Data management at the Accord can be divided into three key areas: factory related
information, inspection and remediation data, and data pertaining to the Accord workplace
programs. The Accord has been working with the Fair Factories Clearinghouse (FFC) in
New York to securely manage Accord data and to publish relevant information through the
Accord website in line with the Accord’s commitment to transparency.
The Accord publishes a complete factory list of all Accord covered factories. The list is
updated each month and includes: the factory address, approximate number of workers, and
number of signatory companies sourcing from each factory. All Accord inspection reports
and corrective action plans (CAPs) are available on the Accord website and are updated
continually with the latest remediation progress. In the Inspection Reports / CAPs section of
the website, the Accord recently added an entry for each factory on the status of remediation
and confirmation of a finance plan for remediation.
The Accord currently covers approximately 1650 factories and data on each factory is closely
tracked through the Accord program from initial factory listing by company signatories, to
inspection scheduling, issuance of inspection reports and CAP approval right through to the
monitoring of remediation progress on an issue-by-issue basis. This information is available
to each company signatory, is reported to the Accord Steering Committee and is available to
the public in aggregate form through Quarterly Aggregate Reports.
The Accord also formatted more than 1200 of our factory inspection reports to be added to
the Ministry of Labour public database as part of our support for the National Tripartite Plan
of Action in Bangladesh; a Government of Bangladesh and ILO led initiative.
Workplace Programs
In the second year of our operations, the Accord advanced the work of implementing our
workplace programs. Our workplace programs are comprised of: occupational safety &
health (OSH) committees, an OSH complaint mechanism, protections to refuse dangerous
work, and OSH training at listed factories.
10
The Accord has built a department with a growing team of trainers to execute these elements
of the Accord5. The first OSH committees are now being trained and supported at factories
which agreed to be part of a pilot project. The pilot OSH committee work has started at
factories where there is a registered union. The Accord will soon be providing training and
support for OSH committee members at factories where there is no union. Work at these
factories will begin in the early part of calendar year 2016. Also in 2016, the Accord will
introduce more general RMG workforce OSH training and informational programs. The
Accord is coordinating closely with the ILO RMG projects and Better Work in OSH
committee and OSH education work.
5
While the trainers train on
resolving OSH
complaints, the OSH
complaints submitted to
the Accord are
processed by the RCCHs
with the technical safety
investigation being
conducted by Accord
staff engineers.
Training of OSH committee worker and management representatives at 15 factories is
underway. Informational sessions with all employees are held at each of these factories so
everyone in the factory knows of the work of and how to support their OSH committee. The
methodology, informational materials, a training curriculum, and materials for each session
of the OSH committee training program have been developed by the Accord in consultation
with a designated working group of company and labour signatories. The experience from
the OSH committee pilot will be used to inform the large scale OSH committee and worker
safety training programs at listed Accord supplier factories.
The Accord considers a functioning labour-management OSH committee at the factory level
as a logical progression of our work to make RMG factories safe. Factories are inspected to
identify safety hazards. Safety hazards are corrected. A labour-management OSH committee
is trained and supported so a structure and systems are in place to monitor and maintain
safety at the remediated factories. The support and training of OSH committees will
continue for the remaining years of the Accord.
Since September 20146, the Accord has received and processed 62 OSH complaints through
our OSH complaint mechanism. The complaints have been received directly from workers,
from workers via an RMG union federation, or from workers via Accord supported Field
Resource Persons who the workers had met with previously to learn about inspection and
remediation at their factory. The training programs with OSH committee members includes
OSH complaint handling with the goal that most safety concerns and safety complaints will
be directly resolved at the factory level.
6
Date of receipt of the
first complaint submitted
under the Accord OSH
complaint mechanism.
Support for the National Plan of Action on Fire Safety and Structural Integrity (NPoA)
The NPoA is an agreement signed by the national and sectoral employers, the national and
sectoral trade unions, and the Ministry of Labour in May 2013 to memorialize the
Bangladeshi tripartite partners’ commitment to making the RMG industry safe in the
aftermath of the Tazreen Fashions and Rana Plaza tragedies. The agreement is the basis of a
$26 million multi-year support program of several donor governments being implemented
through the technical expertise of the international Labour Organization (ILO).
The NPoA is a major endeavor and commitment by the national actors who ultimately need
to guarantee industrial safety and safe working conditions in the RMG industry. The Accord
signatories have expressly committed to supporting the NPoA to help build the capacity of
the local social partners to meet these mandates and obligations.
The Accord has served as technical resource to several programs organized by the ILO with
relevant technical and support staff of the Ministry of Labour, Inspectorate of Factories, and
the Civil Defense and Fire Service. The Accord Chief Safety Inspector and senior technical
staff have served as resource persons to these programs in various subject areas including:
follow up inspection procedures; remediation progress tracking systems; and data
management and reporting systems. Relevant NPoA colleagues have spent time at the
Accord office with Accord RCCH and engineering staff to see firsthand how our systems,
operations, and protocols work in practice.
11
>2 MILLION
WORKERS COVERED
SIG >
N A 215
TO
RI
ES
>1600
FACTORIES COVERED
12
DIRECTORS’ REPORT
Directors’ Statement
In the second year of the Accord, the Directors, Steering Committee, the Executive
Leadership Team and all Signatories have continued to work tirelessly to see this ground
breaking initiative meet its goals and commitments.
We are proud that over 215 global brands and retailers have now signed the Accord, covering
now over 1650 garment factories and in excess of 2 million workers.
We are pleased that Accord has inspected all newly listed factories that were not inspected in
the first initial round of inspections. All Accord listed factories have now been inspected. We
are confident that our amplified efforts and resource allocations will lead to remediation
being completed at all inspected factories by the end of our 3rd year.
We publish herewith the financial report for the year ending 31st December 2014
highlighting a deficit on income over expenditure of $3,885,806. This deficit is primarily due
to the costs of conducting the initial inspections of Accord listed supplier factories. An
accelerated payment schedule of signatory company annual fee payments was implemented
in June 2014 to address the cash flow issue created by the cost of the initial factory
inspections. The accelerated payment for the 2nd year fees will be offset by equal,
proportional reductions to signatory company fee payments in years 3, 4, and 5 of the
Accord. We are confident that this solution will not affect the ability of the Accord to perform
its work or negatively influence the budgetary position and full solvency of the Accord.
The budget for the financial year ending 31st December 2015 is projected to generate a deficit
of $150,255 due to incurring the full cost of the inspection programme as previously advised.
Taking into account the surplus of $4.434 million carried forward from 2013 and deficit of
$3,886 million carried forward from 2014, this will result in a cumulative surplus in
December 2015 of $398,700.
In conclusion, we are confident that the Accord is well positioned both financially and
operationally to deliver on its stated purpose of a safe and healthy Bangladeshi RMG sector.
Alke Boessiger-Ramsay
Melanie Steiner
Board Members and Members of the Audit Committee
Amsterdam, 28 April 2016
13
FINANCIAL REPORT
15
1
BALANCE SHEET
ASSETS
December 31 , 2014
$
114 . 353
Tangible fixed assets
Receivables
Debtors
Other receivables and accrued assets
95 . 581
210.688
Banks and petty cash
LIABILITIES
General reserve
Reserve value at January 1
Balance financial year
December 31 , 2013
$
1 . 051
5 . 523 . 481
172 . 233
306 . 269
5 . 695 . 714
7 . 480 . 718
3.070.467
7.901.341
8.767.232
December 31 , 2014
$
4 . 434 . 760
3.885.806-
December 31 , 2013
$
4.434.760
548 . 955
Current liabilities
Creditors
Salaries, taxes, social contributions
Remaining accounts payable
Accounts received in advance
16
56 . 312
41 . 298
360 . 116
6.894.660
4 . 434 . 760
222 . 210
63 . 116
92 . 142
3.955.003
7.352.386
4.332.471
7.901.341
8.767.232
2
STATEMENT OF INCOME AND EXPENDITURE
INCOME
2014
Budget 2014
2013
$
$
$
Signatory fees
13.422.008
12.844.000
5.322.612
Credit interest
1.076
-
94
13.423.084
12.844.000
5.322.706
13.423.084
12.844.000
5.322.706
Total income
EXPENSES
2014
Budget 2014
2013
$
$
$
General
Personnel costs
17
1.682.119
1.562.747
312.827
Organisation costs
139.523
128.200
1.287
Banking and exchange difference costs
245.614
11.837
12.226
Group corporate costs
687.648
543.050
368.860
Bangladesh operations
14.553.986
18.656.090
192.745
17.308.890
20.901.924
887.945
Total expenses
17.308.890
20.901.924
887.945
Result
3.885.806-
8.057.924-
4.434.760
3
ACCOUNTING POLICIES
GENERAL
The financial report has been made in accordance with the Dutch Accounting Standard
Board’s Guideline RJ 640 for ‘Not for profit organizations’.
All assets and liabilities are stated at their face value, unless otherwise mentioned.
Foreign currency amounts are valued against the exchange rate, using the website of
the Belastingdienst. Exchange rate differences have been included in the result.
Tangible fixed assets
Tangible fixed assets are valued at purchase price minus depreciation. Depreciation is based
on the expected duration of life taking into account the 5 year agreement of the Accord.
Depreciation of computers and laptops is 33 , 33 %.
Liquid assets
All cash and bank balances listed under liquid assets are discretionary.
Accounts receivable and accounts payable
Receivables, liabilities and accruals are included at face value, less any provision for doubtful
accounts. These provisions are determined by individual assessment of the receivables.
ACCOUNTING POLICIES FOR DETERMINING THE RESULT
Income
Income consists of signatory fees. The signatory fees are invoiced for the period June-May. So
7 / 12 th is income for this year and 5 / 12 th is deferred income. The signatory fee is calculated
from a scale based on the Brands FOB value of goods exported from Bangladesh.
Result
The result is the difference between income on the one hand and expenses at historical cost
on the other hand, taking into account the above valuation principles.
18
4
SPECIFICATION BALANCE SHEET: CURRENT ASSETS
Receivables
December 31 , 2014
$
December 31 , 2013
$
140.156
5.523.481
Debtors
Debtors
Provision doubtful debtors
44.575-
95.581
5.523.481
Debtors: $ 44 . 575 is the outstanding amount by the end of May 2015 .
Other receivables and accrued assets
To be invoiced
59.559
141.736
VAT
43.906
4.324
Paid in advance
43.040
25.237
Deposits
62.540
937
1.643
-
Miscellaneous
210.688
172.233
Banks and petty cash
ING EUR
1.091.603
2.539.941
ING USD
6.156.964
499.931
3
1
ING savings
HSBC GBP
Dutch Bangla BDT
Petty Cash BDT
Money in transit
86.286
-
143.202
-
2.659
-
0
30.593
7.480.718
19
3.070.467
EXPLANATION OF THE BALANCE SHEET: CURRENT LIABILITIES
December 31 , 2014
$
December 31 , 2013
$
General reserve
Accumulated reserves
Reserve at January 1
4.434.760
Result
3.885.806-
-
Reserve at December 31
4.434.760
548.955
4.434.760
This deficit was generated due to the the roll out of the inspection programme.
The initial inspections mostly took place in 2014 , so the costs are accounted for in 2014 .
The 2014 income only shows 7 / 12 th of the total income for the period June 2014 - May 2015 .
Creditors
Miscellaneous
56.312
222.210
56.312
222.210
Salaries, taxes and social contributions
Social taxes
12.155
6.625
R emuneration foreign employees
29.129
53.705
13
2.786
Net salaries
41.298
63.116
Remaining accounts payable
JD Williams
Expenses Executive Team
Website
Auditor
Double paid signatory fee
Remaining accounts payable
-
47.562
11.349
21.922
-
4.282
18.000
10.604
297.500
-
33.267
7.772
360.116
92.142
The double paid signatory fee was paid back in the beginning of 2015 .
Accounts received in advance
Deferred income
6.894.660
3.955.003
6.894.660
Deferred income is 5 / 12 th of the invoiced signatory fees of year 1 ( 2014 - 2015 ).
20
3.955.003
Off-balance-sheet rights, obligations and arrangements
Rent commitments
The Bangladesh Accord Foundation has a rental agreement in the Netherlands for Keizersgracht 62 ,
Amsterdam which ends at 31 January 2016 . The remaining obligations amounts to $ 40 . 917 , the
amount payable within one year is $ 37 . 917 and after five years $ 0 .
There are rental agreements in the Bangladesh, which end at June 2018 . The remaining obligations
amounts to $ 911 . 077 , the amount payable within one year is $ 247 . 462 and after five years $ 0 .
Vehicle commitments
In Bangladesh several vehicles are rented. The commitments end at 31 December 2018 . The
remaining obligations amounts to $ 327 . 800 , the amount payable within one year is $ 137 . 379 and
after five years $ 0 .
Litigation filed by Accord inspected factory owner
On 21 May 2014 , a factory owner / supplier of Accord signatory companies filed a lawsuit seeking
damages and public apology after an Accord structural safety inspection. Severe structural
concerns led the Accord safety engineers to submit the inspection findings to a Ministry of Labour
and Employment MoLE), Government of Bangladesh formed Review Panel for such cases. After
Review Panel consultations, the MoLE Inspector General issued an order of temporary evacuation of
the building until such time that immediate urgent structural remediation was completed. The
factory owner filed a lawsuit shortly thereafter where Accord is 1 of 7 defendants. The factory is
challenging the authority of the Accord to inspect factories and of the authority of the Review Panel.
The case is now pending before the Court of Joint District Judge, Dhaka, Bangladesh. Accord views
this case as primarily against the MoLE, Government of Bangladesh. Accord is confident about the
legality of its actions in this regard and is strongly defending its position regarding the allegations
made and damages sought.
21
5
STATEMENT OF INCOME AND EXPENDITURE - EXPLANATION INCOME
INCOME
Signatory fees
2014
Budget 2014
2013
$
$
$
13.422.008
12.844.000
5.322.612
13.422.008
12.844.000
5.322.612
Signatory fees 2014 is 5 / 12 th of the total signatory fees of year 1 ( 2013 - 2014 ) and 7 / 12 th of the
total signatory fees of year 2 ( 2014 - 2015 ). There were 189 signatories by the end of 2014 , were
180 were budgeted.
Credit interest
1.076
-
94
1.076
-
94
STATEMENT OF INCOME AND EXPENDITURE - EXPLANATION EXPENDITURES
Expenses
2014
Budget 2014
2013
$
$
$
Gross salaries
407.564
432.142
17.696
Remuneration foreign employees
425.000
441.670
62.500
52.968
86.428
2.299
Pension contributions
275.432
88.187
6.250
Allowances
346.404
340.570
26.603
48.208
45.250
193.729
126.543
128.500
3.750
1.682.119
1.562.747
312.827
Personnel expenses
Social contributions
Consultancy fees
Travel & subsistence
There are 6 board members which are unremunerated.
The executive team consisted of 3 persons for most of 2014 . In October 2014 an executive of the
Accord separated from service. A portion of the separation payment was made as a pension
contribution.
Allowances include medical health and life assurance, home leave, education contribution, housing
contribution and hardship for the members of the executive team based in Bangladesh.
Organisation costs
22
Communications
13.113
14.620
Rent
651
42.863
53.300
-
Office supplies
3.731
775
31
Computer maintenance and installation
9.289
1.580
605
Costs doubtful debtors
44.575
-
-
Depreciation
25.952
57.925
-
139.523
128.200
1.287
STATEMENT OF INCOME AND EXPENDITURE - EXPL ANATION EXPENDITURES (CONTINUED)
EXPENSES
2014
Budget 2014
2013
$
$
$
Banking and exchange difference costs
Banking costs and exchange differences
245.614
11.837
12.226
245.614
11.837
12.226
Most costs are due to the decline in the EUR/USD exchange rate in 2014 .
Group corporate costs
Brands and Steering Committee meetings
67.942
71.000
11.322
Website development and support
79.991
28.500
34.376
Public relations
166.816
121.800
26.492
Legal advise
56.663
83.500
50.092
Bookkeeping and salary administration
41.948
14.250
837
Auditor
32.598
24.000
10.604
1.743
107.500
154.398
236.532
68.000
49.107
3.415
24.500
31.633
687.648
543.050
368.860
R ecruitment executive team
Fair Factories Clearinghouse (FFC)
Miscellaneous
Accord did not anticipate the number of new signatories joining and therefore did not take this
increase into consideration in the FFC hosting and maintenance annual fee. Accord never
budgeted for monthly support costs or development costs in initial FFC budget. This was because
the Accord did not anticipate the amount of work required to maintain the Accord database and
also the Accord did not have any staff who could do this work so relied on FFC support on a hourly
fee basis through 2013 - 2014 .
Bangladesh operations
Meetings and business entertaining
Facilities
Motor pool
Supplies & equipment
Training
Consultants/contractor support
Inspections
Operations people costs
Travel and Subsistence
23
19.296
21.100
-
135.308
138.550
-
69.146
67.020
98
195.547
12.100
149
40.968
109.900
-
231.726
181.250
-
13.500.602
17.417.285
192.498
263.501
600.535
-
97.893
108.350
-
14.553.986
18.656.090
192.745
The budgeted initial inspection costs were based on three inspections per factory. 1500 factories were
expected to be inspected. In reality 1100 factories were inspected.
The Accord was unable to open additional field offices and hire staff at the anticiapted rate due to
pressures associated with starting a new organization, managing completion of a large number of
inspections in a short timeframe, and the impact of approximately 4 months of blockades and
political strikes.
6
TANGIBLE FIXED ASSETS
Acquisition
Lifecycle
(months)
Depreciation
till 2013
Value
1/1/2014
1.051
36
-
1.051
color printer
-
36
-
-
Asus Zenbook
-
36
-
MacBook
-
36
Acquisation
2014
Depreciation
2014
Value
31/12/2014
350
700
7.085
2.165
4.920
-
1.605
178
1.426
-
-
1.305
145
1.160
1.051
-
1.051
9.994
2.838
8.206
-
-
-
-
-
-
1.051
-
1.051
9.994
2.838
8.206
Computers
Camera
3 Sony Vaio Pro
laptops, 4
22 ”monitors, 1
Disinvestments
total
Inspectors
equipment
Ferroscans 8
-
51
-
-
115.766
22.699
93.067
Fluke thermal
imager + 2
clamps meters
-
43
-
-
3.631
253
3.378
2 Pixel IR
camera
-
42
-
-
6.773
161
6.612
Fluke IR
camera+ 2
clamps meters
-
41
-
-
3.090
-
3.090
-
-
-
129.261
23.114
106.147
Disinvestments
-
-
-
-
-
-
total
-
-
-
129.261
23.114
106.147
1.051
-
1.051
139.255
25.952
114.353
Total tangible
fixed assets
7
OTHER INFORMATION
7.1. Statutory provisions governing profit appropriation
The articles of association of the Foundation do not stipulate any provisions governing the
appropriation of profit.
7.2. Appropriation of result
24
By decision of the board the result of $ - 3 . 885 . 806 will be deducted from the general reserve.
7.3. Auditors Report
25
BOARD OF DIRECTORS AS OF APRIL 2016
Alke Boessiger-Ramsay, Uni Global Union
Jenny Holdcroft, IndustriALL Global Union
Karl Gunnar Fagerlin, H&M
Melanie Steiner, PVH
Roy Ramesh Ekandra, United Federation of
Garments Workers
Santiago Martínez Lage, Inditex
Appointed 21st October 2013
Appointed 13th January 2016
Appointed 1st March 2016
Appointed 21st October 2013
Appointed 21st October 2013
Appointed 15th November 2014
BOARD OF DIRECTORS IN 2014 (RESIGNED)
Aleix Gonzales Busquets, Inditex
Andrew John York, N-Bown
Roger Hubert, H&M
Monika Kemperle
21st October 2013 to 15th November 2014
21st October 2013 to 15th November 2014
15th November 2014 to 1st March 2016
21st October 2013 to 13th January 2016
EXECUTIVE LEADERSHIP TEAM
Rob Wayss - Executive Director
Former Chief Technical Advisor in Bangladesh for the International Labour Organisation.
He previously worked in several capacities for the American Center for International Labor Solidarity,
an organisation with close ties to U.S. trade unions, the New York City Mayor’s Office of Labor
Relations, the United States Agency for International Development and the US Peace Corps.
Brad Loewen - Chief Safety Inspector
Former Administrator of Commercial Plan Examination and Inspections at the City of Winnipeg.
He has previously worked in roles related to fire safety, workplace safety and health, mediation and
conciliation, and engineering for organizations including the Canadian Government, the University
of Winnipeg, the Government of the Northwest Territories, the Province of Manitoba and Steinbach
Fire Dept.
29
LIST OF SIGNATORIES
30
A A&M Holmberg Oy
Abercrombie & Fitch
Accolade USA Inc
Adidas Group
Åhléns AB
ALDI North
ALDI South
American Eagle Outfitters, Inc.
APG and Co.
Arcadia Group
Aristrocrate Distributors
Artsana S. P. A (Chicco & Prenatal)
B Baumhueter International GmbH
Bebe Clothing (UK) Ltd
Benetton
BESTSELLER
BHS Limited
Bonmarche
Brand Co Management Ltd
Brands Fashion GmbH
Bristol B.V
Brüzer Sportsgear LTD
C C&A
CAMAIEU
Carrefour
Casino Global Sourcing
Chantal SAS
Character World Ltd
Charles Vögele Trading AG
Chicca Body-Fashion GmbH & Co. KG
CMT Windfield
Columbus Textilvertrieb GmbH
Comazo GmbH & Co. Kg
Comtex GmbH
Coolcat
Coop Danmark
COTTON ON GROUP
CROWN TEXTIL GmbH
D DEBENHAMS
Danielle Group
Dansk Supermarked Group
Daytex Mode GmbH
De Bijenkorf
DELTEX Handelsgesellschaft mbH
Designworks Clothing Company PTY LIMITED
Distra Warenhandelsgesellschaft mbH & Co. KG
DK Company
DOAPI - Auchan (registered SNC OIA)
DPDB GROUP
E E!WOTEX GmbH (TAA MOSGEN GmbH)
E. Leclerc
E5
El Corte Inglés
EMC Distribution
ENTRADE MANUFACTURING CO. LIMITED
Ernsting’s family GmbH & Co. KG
ESPRIT
Etam Groep Retail BV
F Face to Face
Fast Retailing Co. Ltd.
G
H
I
J
K
L
M
Fat Face Ltd
FINANCIERE D’AGUESSEAU
Fipo Group
Florett Textil GmbH & Co. KG
Forever New Clothing
Fruit of the Loom
Full-Service Handels GmbH
G-Star
Gekås Ullared AB
G.Gueldenpfennig GmbH
GEBRA Nonfood Handelsgesellschaft mbH &
Co. KG
Gina Tricot
Glitter Gear
Gruppo Coin/OVS
Hakro Activewear
Handels GmbH (Fashion Team)
Hanson Im- und Export GmbH
Hawkesbay Sportswear Limited
Heli Far East Ltd
Helly Hansen AS
HEMA
Hemtex
Hennes & Mauritz AB (H&M)
Herding Heimtextil
Hess Natur-Textilien GmbH
Holland House Fashion
Horizonte Unternehmensgruppe
Horst Krüger GmbH
Hunkemöller International
Hüren OHG professional outfits
HVEG (Fashion Linq)
IC Group
ICA Gruppen AB
INDITEX
INTERSPORT AB
J2 Licensing, Inc
JBC
JOGILO N.V.
John Lewis
Jolo Fashion
Julius Huepeden
Juritex (Jebsen & Jessen Group)
KappAhl
KARSTADT Warenhaus GmbH
Kik Textilien
Killtec Sport - und Freizeit GmbH
Kmart Australia
Knights Apparel
Fristads Kansas Sverige AB
L.A. T Sportswear
Lakeshirts, Inc
Li & Fung
Licensing Essentials Pty. Ltd.
Lidl (Gesellschaft und Umwelt International)
Loblaw Companies Limited
LPP S.A
MALU N.V.
MANGO
Marks & Spencer
N
O
P
R
S
T
31
Matalan
MAVI
Mayoral Moda Infantil S.A.U.
McGregor Fashion Group
METRO AG
Milords International Ltd.
Miro Radici Hometextile GmbH (Belotex GmbH)
Monoprix
Mosgen Limited (Peakstone Group)
Mothercare
MS Mode
multiline Textil GmbH
MV Sport/Weatherproof
N Brown Group
New Frontier GmbH
New Look Retailers Ltd
New Wave Group AB
NEXT
Nu Sourcing Ltd
Nutmeg (Wm Morrison Supermarkets plc)
O’Neill
OLYMP Bezner KG
Orsay GmbH
Ospig Textil Logistik GmbH
OTL Brands Ltd (Oceania Trading Ltd)
Otto Group
Outerstuff Ltd
Padma Textiles
Perrin, Inc
Pretty Girl Fashion Group (Faith Fashion)
Primark (ABF)
PUMA
PVH
PWT Brands (Texman)
Rawe Moden GmbH
Reima Oy
Renaissance Sourcing Limited
REWE
Rheinwalt Trade & more GmbH
River Island
RNB RETAIL AND BRANDS AB
S.Oliver
Sainsbury’s
Sandryds
Schmidt Group (Bay City Textilhandels GmbH)
Scoop NYC/ Zac Posen
SEAN JOHN
Shop Direct
Specialty Fashion Group
Stadium AB
Steilmann Holding AG
Stockmann Plc (Lindex)
Suprema Strick- und Wirkwarenfabrik GmbH
Switcher
T-Shirt International
Takko Holding GmbH
Tally Weijl AG
Target-Australia
Tchibo GmbH
Techno Manufacturing Limited
U
V
W
Y
Z
Ted Bernhardtz
Teddy Spa
TEIDEM
TEMA GROUP (LC Waikiki)
Tesco
Tex Alliance
Texsport BV
The Antigua Group, Inc.
The Sting B.V.
The Woollen Mill (Edinburgh) Ltd
Top grade Int.
Top of the World
Topline Shirts
Transmarina Handelsgesellschaft mbH
TV Mania UK Ltd
Uhlsport GmbH
Uncle Sam
Unibrands AB
United Labels AG
VAN DER ERVE
Varner Group
VDR Fashion Group B.V.
Veldhoven International B.V
Verburgt Fashion B.V.
VIANIA Dessous GmbH
Vingino (Love for Denim BV)
Vistaprint Schweiz GmbH
Voice Norge
W Republic Apparel
We Europe BV
Wibra Supermarkt B.V.
Wilson Designs
Woolworths Australia
Workwear Group
Wunsche Group
Y’Organic BV
Yanis Textil Trade GmbH
Zeeman textielSupers B.V.
Zephyr Headwear
Union Signatories
IndustriALL Global Union
UNI Global Union
IndustriALL Bangladesh Council
Bangladesh Textile and Garments Workers League
Bangladesh Independent Garments Workers Union Federation
Bangladesh Garments, Textile & Leather Workers Federation
Bangladesh Garment & Industrial Workers Federation
Bangladesh Revolutionary Garments Workers Federation
National Garments Workers Federation
United Federation of Garments Workers
Witness Signatories
Worker Rights Consortium
International Labor Rights Forum
Clean Clothes Campaign
Maquila Solidarity Network
33
BANGLADESH ACCORD FOUNDATION
Level 13, AJ Heights,
Cha 72/1/d, Pragati Sarani
North Badda, Dhaka - 1212
Bangladesh
Tel +88 02 9852093-6
+8801766695900
Keizersgracht 62-64
1015 CS Amsterdam
The Netherlands
Tel +31 (0) 20 520 7431
contact@bangladeshaccord.com
www.bangladeshaccord.org
34
GRAPHIC DESIGN: JUSTAR.nl
April 2016
ACCORD
FOR A SAFE
READY-MADE GARMENT INDUSTRY
IN BANGLADESH